Discussion Papers no. 677
Technology choice, uncertainty and welfare
Prices vs. quantities
his paper shows that tradable emissions permits and an emissions tax affect the firms' technology choice differently under uncertainty. A tax encourages the most flexible technology if and only if stochastic costs and the equilibrium permit price have sufficiently strong positive covariance, compared with the variance in consumer demand for the good produced. Moreover, the firms' technology choices are socially optimal under tradable emissions permits, but not under an emissions tax. Hence, modeling endogenous technology choice provides an argument in favor of tradable emissions permits as compared with emissions taxes.
Om publikasjonen
- Tittel
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Prices vs. quantities. Technology choice, uncertainty and welfare
- Ansvarlig
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Halvor Briseid Storrøsten
- Serie og -nummer
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Discussion Papers no. 677
- Utgiver
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Statistics Norway
- Emne
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Discussion Papers
- ISSN
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1892-753X
- Antall sider
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43
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
Kontakt
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